The Income Tax Department (ITD) has recently sent out notifications to around 22,000 taxpayers, including salaried individuals, high-net-worth individuals, trusts, and Hindu Undivided Families (HUFs). These notifications are regarding discrepancies between the deductions claimed in their tax returns and the information provided in their Form 16 or Annual Information Statement (AIS), or the data available to the Income Tax Department. These notifications pertain to tax returns for the assessment year (AY) 2023-24 and have been dispatched in the last 15 days.
Among these, approximately 12,000 notifications were sent to salaried taxpayers when the difference between the tax deductions they reported in their returns and the records held by the department exceeded ₹50,000. Moreover, intimation letters were issued to approximately 8,000 taxpayers who filed tax returns as Hindu Undivided Families (HUFs), in cases where the income variation between their returns and the information maintained by the IT department exceeded ₹50 lakh. For 900 high-net-worth individuals (HNIs), this difference amounted to ₹5 crore or more, and for 1,200 trusts and partnership firms, it exceeded ₹10 crore.
These notifications aim to address and rectify discrepancies in the tax declarations of these taxpayers. On a broader scale, primary data analysis has identified irregularities and disparities in the tax filings of around 200,000 taxpayers. These disparities primarily involve differences in income declarations, expenses, or bank account information provided in their income tax returns compared to the data gathered by the IT department, which is derived from transactions associated with their bank or UPI accounts.
This data analysis is a crucial part of the ITD's efforts to ensure tax compliance and accuracy in financial reporting.
What Are the Available Options?
Individuals who have received notifications about inconsistencies in their tax returns have several avenues to address the matter. They can settle the outstanding tax, along with any applicable interest, by submitting a revised and corrected tax return. Furthermore, the ITD has initiated the process of sending intimations to salaried taxpayers whose deductions do not align with their Form 16. This is part of the ITD's campaign to combat tax evasion. Form 16 is a certificate issued by an employer to a salaried employee, indicating the amount of tax deducted from the employee's salary during the financial year. The ITD cross-references the information in Form 16 with the details in the employee's income tax return. If any discrepancies are found, the ITD sends an intimation to the employee.
The intimation serves to alert the taxpayer about possible incorrect claims or omissions in their income tax return. It is essential for taxpayers to verify and rectify any discrepancies to ensure accurate reporting of their income.
In case a refund claim has been made in the income tax return, the ITD may request confirmation and clarification regarding the claims made. Taxpayers are encouraged to respond promptly and accurately to these communications from the ITD to maintain consistency with the information reported in their tax returns and Form 16.
The author is a Chartered Accountant with 2 decades of experience into Accounting, Taxation, Auditing, Risk & Compliance, Credit Controls, Due diligence. Currently, the author is the founder and managing partner at RRL Global Services. She can also be reached at rrlglobal@yahoo.com
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